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Financial context of business – I

Financial Markets

7.1 Money markets

 Treasury bills, commercial bills, CDs and other short term debt

 Used by banks, companies, local authorities and the government

 Note: discount houses purchase surplus treasury bills to ensure the full weekly
issue is taken up.

7.2 Stock markets

 Full equities market

– Primary and secondary market in ordinary shares, prefs and debentures

 AIM

– For smaller companies

 Government bond/gilts market

– short (up to 5 years) medium (5–15 years), long (over 15 years) and
undated stock

– Tender rather than fixed price

Illustrations and further practice

Now try TYUs 5 to 13 from Chapter 3

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